Applicability of Case-by-Case MACT Subject of Notice of Intent to Sue and Proposed Rule

08.01.2010

By Larry Kane, Attorney, Bingham Greenebaum Doll LLP

Sierra Club has raised contentions of failure to make a case-by-case MACT determination in its notice of intent to sue U.S. EPA concerning a Title V permit issued to a power plant in Maysville, Kentucky (East Kentucky Cooperative’s Hugh L. Spurlock Generating Station). Sierra Club asserts in its notice, dated June 22, 2010, that EPA failed to respond within the 60 days allotted by the Clean Air Act (CAA), 42 U.S.C. §7661d(b)(2), to a petition by Sierra Club objecting to the Title V operating permit.

One of the main issues raised in the notice (and the earlier petition) is the alleged failure of the state permitting agency to impose case-specific MACT emission limits on the source to control various hazardous air pollutants (HAPs), including certain metals, such as mercury, arsenic and lead, as well as hydrogen chloride, hydrogen fluoride and dioxins. A MACT rule has not been adopted by EPA for steam electric generating units and the 2005 Clean Air Mercury Reduction Rule (CAMR) was vacated by the federal courts.

Although not directly implicated for the electric generating source category, a similar issue suggested by the notice of intent to sue is the status of a source, relative to the case-by-case MACT requirements of Section 112(j) of the CAA (sometimes referred to as the MACT “hammer” provisions), when a NESHAP setting MACT standards for the source’s industrial category has been vacated by the courts pursuant to a legal challenge. Should sources in the affected source category be insulated from Section 112(j) requirements while EPA addresses deficiencies in the NESHAP pursuant to a vacatur order? Conversely, should sources in such a source category be construed to subject to EPA’s “failure to promulgate a [MACT] standard” within the meaning of Section 112(j)(2)? EPA clearly favors the latter interpretation, as is evident from a proposed rule published March 30, 2010, at 75 FR 15655, to resolve the question of Section 112(j) applicability under such circumstances. The proposed rule would make the 112(j) case-by-case MACT requirements obligatory in all industrial source categories where the pertinent MACT rule has been vacated. EPA’s position is stated in the proposed rule as:

“. . . EPA’s long-standing position is that section 112(j) applies in the case of the complete vacatur of a section 112(d) rule establishing MACT standards for an initially listed major source [category]. We are proposing language changes within the rule to clarify the applicability of section 112(j) in the case of such a complete vacatur. Specifically, we are proposing to revise the definition of the affected sources to identify the triggering mechanism for section 112(j) . . . to when ‘there is no section 112(d) standard in place on or after the section 112(j) deadline.’ This is consistent with EPA’s view that when there has been a complete vacatur of a section 112(d) rule establishing MACT standards, there has been in effect a ‘[f]ailure to promulgate a standard’ within the meaning of section 112(j).” 75 FR at 15658.

If EPA’s proposed rule is final adopted, it will immediately affect major HAP sources in the following source categories: Polyvinyl Chloride and Co-polymers Production, Brick and Structural Clay Products Manufacturing, Clay Ceramics Manufacturing, and the Industrial, Commercial and Institutional Boilers and Process Heaters.